Massive cuts recommended

The Abbott government's Commission of Audit has recommended sweeping changes to education policy, including winding back the Commonwealth's responsibilities for schools, abolishing all Commonwealth vocational education programs and making university students contribute a greater share of their education costs.

The report, released on Thursday, recommends the Commonwealth hand complete control of the non-government school sector to state governments, returning to the model in place before the 1970s.

The Commonwealth’s sole responsibility would be providing three separate, non-transferable funding pools for public, independent and Catholic schools.

The Commission of Audit has called for the government to cut back its investment in education and vocational programs.

The recommendation was immediately opposed by the Catholic and independent school sectors, which said their direct funding relationship with the Commonwealth provided security and certainty.

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"It needs to be recognised that state and territory governments are not only providers of public schools but they also compete with non-government schools," Independent Schools Council of Australia executive director Bill Daniels said.

"There needs to be a clear separation between the allocation of Commonwealth funds and state government responsibilities."

The report echoes the Abbott government's policy not to proceed with the fifth and sixth years of the Gonski school funding package - the two years with the biggest forecast spending increases. Describing the new school funding arrangements as "complex, inconsistent and [lacking] transparency", the report recommends basing future Commonwealth funding on 2017 levels, adjusting them to the Commonwealth Price Index and Wage Price Index.

School funding was originally slated to be discussed at Friday's Council of Australian Governments (COAG) meeting, but it is understood the issue is no longer on the agenda.

In the higher education sector, the report argues students should bear more of the cost of their education.

University graduates should pay an average 55 per cent of their higher educations costs - up from the current level of 41 per cent, according to the Commission of Audit recommendations. The Commonwealth's share of funding would fall from an average of 59 per cent to 45 per cent, recognising the high private benefit to a university degree.

The Minister for Education should also consider a full or partial deregulation of university fees to increase competition among universities.

As well as paying more, graduates would be required to pay their debts back sooner. The report recommends students begin repaying their Higher Education Loan Programme (HELP) debt when they start earning $32,354 – the minimum wage - rather than the current $51,309.

The generous interest rate for student loans – currently pegged to the Consumer Price Index – would rise to a level that reflects the full cost to the Commonwealth, including the cost of bad debts.

The report also recommends the federal government transfer all policy and funding responsibilities for vocational education to the states. All Commonwealth vocational education and training programs – including support for apprenticeships – would be scrapped.

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